September 2023

The Names Behind the Aid

September 28, 2023

By: Sean Hudson, FAS Senior Consultant

Financial Aid uses a lot of acronyms, but we also have a few programs named after people. Some financial aid administrators don’t even realize they are “real” people. So, I thought it would be fun to introduce people to the faces behind the names of three Federal aid programs and one New York State program that we have worked with for years: the Stafford Loan Program, the William D. Ford Loan Program, and the Pell Grant. Then because I’m from NY and love my city of Buffalo, I added the Arthur O. Eve HEOP Program.

Robert T. Stafford (August 8, 1913 – December 23, 2006)

The Stafford Loan Program is named after Senator Robert Stafford from Vermont. He served as Attorney General of Vermont from 1955-1957, Lieutenant Governor of Vermont from 1957-1959, Governor of Vermont from 1959-1961, US House of Representatives from 1961-1971, and US Senator from 1971-1989. He was also a Navy Veteran from WWII and Korea.

Stafford was an environmentalist, a strong advocate of higher education, and even gave his support for the 2000 Vermont law legalizing civil unions for gay couples. Early in his career, he voted for the Civil Rights Acts of 1964 & 1968 and the Voting Rights Act of 1965.

Senator Stafford also helped pass a law, now known as the Robert T. Stafford Disaster Relief and Emergency Assistance Act, or Stafford Act, to coordinate federal natural disaster assistance.

In 1988, Congress renamed the Federal Guaranteed Student Loan program the Robert T. Stafford Student Loan program, in honor of his work on higher education.

William David Ford (August 6, 1927 – August 14, 2004)

William D. Ford served in the Michigan State Senate from 1962-1964, then in the US House of Representatives from 1965-1995.

He is best known for his support of workers and education opportunities. He authored the Workers Adjustment and Retraining Notification Act (the “WARN Act” or “Plant Closing Act”) and the Middle-Income Student Assistance Act. He also played a key role in passing the Family and Medical Leave Act of 1993. In 1994, the Federal Direct Student Loan Program was named in his honor.

Like Senator Stafford, Representative Ford served in the Navy in WWII. He was also an Air Force reservist from 1950-1958.

Interesting facts: He is buried in Arlington National Cemetery and is not related to Henry Ford or Gerald Ford, although all three are from Michigan.

Claiborne Pell (November 22, 1918 – January 1, 2009)

Claiborne Pell is one of the most interesting politicians I have ever read about. He was a US Senator who served Rhode Island from 1961-1997. He was the main sponsor of the 1972 bill that reformed the Basic Educational Opportunity Grant (BEOG). In 1980, the BEOG was renamed the Pell Grant in honor of his work on education legislation. Foreign to us now, in the early days of the Pell Grant there would be more money available than applied for!

Earlier in life, at the start of WWII, he was with his father, who was then United States Ambassador to Hungary. He drove trucks carrying emergency supplies to prisoners of war in Germany and was detained several times by the Nazis.

During WWII, Senator Pell enlisted in the US Coast Guard. His ships took part in the Allied invasion of Sicily and then the Italian mainland. After WWII, he remained in the US Coast Guard Reserve until 1978.

After WWII he served in the United States Department of State as a Foreign Service Officer in Czechoslovakia, Italy, and Washington, D.C. He was fluent in French, Italian, and Portuguese. In 1945 Senator Pell helped draft the charter that created the United Nations.

Observers thought Senator Pell was eccentric because he would wear old suits, use public transportation, and buy cheap used cars despite being very wealthy. He was also open about his belief in the paranormal which drew skepticism. Pell also wore his father’s belt as a memento, but his father was much larger, and the belt would wrap around his waist twice.

Throughout his long career, Pell supported some of the major legislation of our time. He had a wide range of interests from the Arts to environmental causes. Early in his senate career, Pell was a major legislative sponsor of the National Sea Grant College Program in 1965 and 1966 serving to support marine research and develop maritime industries. This sparked the growth of the fields of oceanography and marine science. He was the main sponsor of the bill that created the National Endowment for the Arts and the National Endowment for the Humanities. Pell also advocated for support of mass transportation to help reduce pollution from cars. To recognize his years of service, Rhode Island renamed the Newport Bridge the Claiborne Pell Bridge.

Arthur O. Eve (March 23, 1933 – Present)
Assemblyman Arthur O. Eve served in the New York State Assembly from 1967- 2003 and Deputy Speaker of the Assembly (1979–2003) representing districts in Buffalo, New York.

During his first term in the Assembly in 1967, Eve was able to secure the funding to start the Equal Opportunity Program (EOP) to provide opportunity, access, and support for underserved populations within the State University of New York (SUNY) System. The first class started at the State University College in Buffalo in 1969. He then led the effort to pass legislation to expand the program to private institutions, creating the Higher Education Opportunity Program (HEOP) in 1969. The first class started in the 1070-71 school year.

The Arthur O. Eve Higher Education Opportunity Program (HEOP) provides a broad range of services to New York State residents who, because of educational and economic circumstances, would otherwise be unable to attend a postsecondary educational institution.” Downloaded from www.nysed.gov 5/17/23. The program is now at over 50 colleges across New York State.

Students across the country and in my home, state have benefited from the hard work of these political figures. We use their names every day, but do most people know why their name is attached? The fight to provide affordable education and opportunity for all Americans transcends partisan boundaries. They all came from what has been called “The Greatest Generation.” The question I have is who will the next Financial Aid Program be renamed after? Maybe Lamar Alexander?

Prepare for the Approaching FISAP Deadline

September 27, 2023

By: Gary Byers, FAS Sr. Consultant

The 2022-23 FISAP is due Sept. 29, 2023. Does your institution scramble to reconcile funds to meet the annual deadline? Wouldn’t it be nice to submit an accurate report instead of data that hasn’t been adequately reconciled? By following the advice below, you can have a panic-free experience without having to make corrections after that date. Although the FINAL FISAP edit corrections are not due until Dec. 15, 2023, don’t you have better things to do?

Per the U.S. Department of Education, schools should reconcile FSA financial records monthly (34 CFR 668.166). They recommend reconciling on a more frequent basis during periods of high transaction volume. Some programs require monthly reconciliation (William D. Ford Direct Loan, FSEOG, FWS, and Federal Perkins programs). The more frequently reconciliation is performed, the more likely issues/discrepancies will be identified and can be resolved promptly.

Why do so many institutions procrastinate in reconciling federal funds?

Understaffed
Not properly trained
Not a priority with other pressing issues
Lack of knowledge in the Financial Aid Office and school administration

Schools should work with their administrative software systems specialists to create a program that compares COD student-level data to:

Student Title IV award information is maintained separately by the Financial Aid office;
Title IV funds are posted to each student’s account; and
Report exceptions found during the comparison process.

Common discrepancies that may be identified using COD reports in your institution’s reconciliation process include:

The recipient’s disbursement data appears in the school’s records for an award amount less than or greater than the amount shown in the COD system, and
Recipient disbursement data appears on the school’s records but does not appear in the COD system

Per an ED review, schools, where financial aid and business office staff meet monthly when the reports are generated to resolve discrepancies, take hours instead of days to reconcile.

Reconciling federal funds can be a daunting task for educational institutions, but it is a crucial one. By addressing common challenges, implementing best practices, and starting early, you can significantly reduce stress during the fall term and ensure a smoother FISAP submission process. Ultimately, this proactive approach allows you to focus on more important tasks and priorities within your institution.

For more information click here.

What YOU need to know about FAFSA Simplification: A Guide for Financial Aid Administrators and Leaders

September 20, 2023

By Sharon Hassan, FAS Senior Consultant

Upcoming changes represent a significant shift in financial aid, with the good-intentioned hope of streamlining the application process and making aid more accessible to students. The modifications are poised to reshape students’ eligibility for financial aid and the extent of these changes will depend on varying factors, including the student’s family financial situation, choice of institution, and the number of students concurrently enrolled in college. Let’s break down the key changes you need to know and care about as colleges and university administrators anticipate the rollout.

Forget everything you thought you knew about the FAFSA process. New FAFSA. New Calculation. New Opportunities.
2024-2025 FAFSA is delayed until December 2023. Communications to incoming and returning students should emphasize the importance of completing their FAFSA by October 1st.
Automatic Zero EFC for Some Families: Students from families with an adjusted gross income (AGI) at or below a certain threshold automatically receive an EFC of zero, making them eligible for maximum federal aid.
Elimination of the Expected Family Contribution (EFC): The FAFSA Simplification Act replaces the Expected Family Contribution (EFC) with the Student Aid Index (SAI). The SAI is used to determine a student’s eligibility for federal financial aid programs.
Elimination of Verification for Some Applicants: The act reduces the number of students selected for the verification process, which requires them to provide additional documentation to verify their FAFSA information.
Simplified FAFSA Form: The FAFSA form has been simplified, making it shorter and more user-friendly. It reduces the number of questions and eliminates some redundant or complex inquiries.
Simplified Income and Asset Reporting: There are fewer questions about assets and untaxed income on the FAFSA form, making it easier for students and parents to complete.
Increased Pell Grant Eligibility: The FAFSA Simplification Act increases the maximum Pell Grant award and expands eligibility to more students, including those with incarcerated parents, and will link eligibility to family size and the federal poverty level.
Revised Dependency Overrides: The FAFSA Simplification Act provides more flexibility for financial aid administrators to grant dependency overrides for students with extenuating circumstances, such as abandonment by parents or abusive family situations.

As we prepare for the FAFSA changes, administrators must stay informed and adapt to the new rules. By understanding these key changes and utilizing available resources, you can effectively assist students in navigating the FAFSA process and accessing the financial aid they need for their education.

Are you fully staffed for the federal challenges coming to your institution? Prepare for the upcoming FAFSA changes with FAS. Contact us today!

Leading Through Uncertain Times: An Interview with Robert Heil

September 20, 2023

By: FAS Staff 

Robert Heil, CEO of Financial Aid Services, LLC (FAS) recently discussed five pivotal things about effectively leading during turbulent times.

In a recent interview with Authority Magazine, as part of the “Five Things You Need To Be A Highly Effective Leader During Turbulent Times” series, Heil shared valuable insights and experiences that shed light on the essence of effective leadership when facing uncertainty and challenges. The five principles discussed are essential for any leader navigating uncertain and turbulent times. We invite you to read more about Robert’s experiences. Click here to read the full interview.

Effective leadership is the key to overcoming challenges and achieving long-term success in today’s ever-changing business landscape. Gain valuable leadership insights in our latest eBook Challenges Deserve Solutions: How Financial Aid Offices are Overcoming Unprecedented Challenges with Innovative Partnerships. Download the free eBook and take the first steps toward becoming a highly effective leader in turbulent times.

Getting Your Student Loan Discharged

September 14, 2023

By: Gary Byers, FAS Sr. Consultant

Borrower defense to repayment is a legal ground for discharging federal Direct Loans. According to the Department of Education , students and parents may have a borrower defense to repayment if your institution engaged in “certain misconduct related to the making of a federal loan or the educational services it provided which caused harm warranting a final discharge of your applicable federal Direct loans. If the U.S. Department of Education (ED) approves your application for borrower defense, it will discharge any remaining balance on the federal student loans taken out to attend the school and may also refund loan payments you already made.”

Below are six instances for which students may qualify for borrower defense:

Substantial Misrepresentation When an educational institution engages in substantial misrepresentation, it effectively deceives or misguides individuals regarding critical aspects such as educational offerings, financial obligations, or the future employability of graduates. This misleading information plays a pivotal role in the decision-making process, whether it involves enrolling, staying enrolled, or obtaining loans.
Substantial Omission of Fact A significant omission occurs when an educational institution withholds or conceals crucial information that any reasonable person would find essential when deciding on enrollment, continued enrollment, or loan acquisition.
Breach of Contract A breach of contract takes place when a mutual agreement exists between a student and their school, and the school fails to fulfill its promises as outlined in that agreement. This agreement typically arises in connection with a student’s decision to attend or continue their education, secure loans, or disburse funds related to a loan.
Aggressive and Deceptive Recruitment
Aggressive and deceptive recruitment tactics come into play when a school employs various manipulative practices, including:

- Coercing or pressuring individuals into making swift enrollment or loan-related decisions.
- Exploiting the limited knowledge or experience of prospective students regarding postsecondary institutions, programs, or financial aid.
- Dissuading individuals from seeking advice from others before making enrollment or loan-related choices.
- Obtaining contact information through deceptive means, such as misleading websites false employment claims, or fictitious institution rankings.
- Employing threatening or abusive language towards individuals.
- Persistently contacting individuals for enrollment purposes despite their explicit request to cease such communication.

Judgment A judgment against an educational institution signifies that a court has ruled that the institution has violated the law. This judgment typically results from the institution’s actions or omissions related to loan origination or the provision of educational services tied to loans. Settlements, however, do not qualify as judgments.
Prior Secretarial Action Approval for a borrower defense discharge can occur when the U.S. Department of Education revokes a school’s provisional program participation agreement or denies recertification due to conduct that aligns with one of the borrower defenses outlined in points 1–4 above. This provides an avenue for relief in cases where a school’s behavior warrants such action.

Based on the 2023 Borrower Defense Regulation, your application must be “materially complete” to be considered. If your application is not materially complete, your application will be denied. Just because your application is considered materially complete does not necessarily mean it will be approved.
To be materially complete, your application must contain the following information:

A description of one or more acts or omissions by your school
- ED can only approve your application if—after reviewing your claims, your evidence, and your school’s claims and evidence—we can determine that your claims are more likely than not to be true.
- Explain what your school did or failed to do that is covered by the kinds of misconduct that qualify for borrower defense discharge discussed above.
The school or school representative who committed the act or omission
- - Include what school or representative of the school committed the misconduct.
    - What exactly did the school say or represent to, or conceal or suppress from you?
    - Who or what provided you with this information or concealed this information from you (include the person’s name and title, if known)?
    - When and where did this conduct occur (the approximate date or time of year, and whether it was during a campus tour or interview, in a meeting, or over the phone)?
    - How was the information communicated to you (for example via email, in person, through an advertisement)?
    - How was the information deceptive or misleading, and how did you determine that the information was deceptive or misleading?
    - Why was the information provided to you or concealed from you important to you when you enrolled—in what way did it influence your decision?
    - How did this conduct harm you?
Approximately when the act or omission occurred Include when you experienced the misconduct that you allege.
How did the act or omission impact your decision to attend the school, to continue attending the school, or to take out the loan for which you are asserting a defense to repayment How did the alleged misconduct affect your decision to enroll or to continue your enrollment at the school.
A description of the detriment you suffered because of the school’s act or omission Explain what the result of the school’s misconduct was, specifically what harm you experienced because of the misconduct.

For more information and to obtain a form, go to: https://studentaid.gov/manage-loans/forgiveness-cancellation/borrower-defense

Resumption of Student Loan Repayment  

September 7, 2023

By: Sean Hudson, Sr. Consultant FAS

In March 2020, the Federal Government suspended Federal Student Loan payments to help borrowers struggling with the impact of the COVID-19 Pandemic. This provided relief to over forty million borrowers experiencing a reduction in income or even job loss due to the Pandemic. It also helped families overcome the sudden increase in the cost of basic needs, such as food, fuel, and housing. Now that the Pandemic has waned, borrowers must prepare for Federal Student Loan repayments to begin again. Are borrowers prepared? Colleagues at Default Prevention Companies and Loan Servicers all state that borrowers are confused about what resumption means as repayment looms.

When Does Repayment Begin?

The first question for borrowers is when does repayment really begin? Borrowers are unsure if it is August, September, or October. The current administration previously announced the student loan payment pause—which has been extended eight times—would finally end 60 days (about 2 months) after the Supreme Court ruled that the administration’s student loan forgiveness program would not be allowed (June 30, 2023). To add to the confusion the administration is offering a 12-month grace period on reporting missed student loan payments to the three credit agencies. Some students see this as another deferment, which it is not. Then, will they need to reapply for the payment plan they were on prior to the pandemic? If they had auto-debt set-up, will they need to re-elect that option? The Federal Government also changed some of the loan services during the pandemic, meaning some borrowers are now working with different companies.

One of the other major concerns is the re-incorporation of student loan payments into borrower’s monthly budgets. Will borrowers be able to afford their payments when they have become accustomed to not having this debit each month? Borrowers changed their lifestyles and spending habits. How many borrowers will struggle with payments? How many will go into default? How will this impact the US economy when borrowers have less money to spend on other things?

Understanding the Repayment Plan

Even for Financial Aid Administrators, the changes will be disorienting. What income-based repayment options do students have? Prior to the pandemic, we had the Income-Contingent Repayment Plan (ICR), Income-based Repayment Plan (IBR), Pay As You Earn (PAYE) Repayment Plan, and REPAYE. Now the Administration has introduced the Saving on Valuable Education (SAVE) Plan. Which one best fits borrowers/which ones do they qualify for? The Administration will replace REPAYE with the new SAVE Plan, automatically enrolling REPAYE borrowers. SAVE offers the lowest repayment amount and is accessible to all borrowers, eliminating the need for loan consolidation to join specific IBR Plans.

What will be the impact?

How does the loan payment pause impact borrowers previously on income-based repayment plans that had loans forgiven after a set number of payments? Do borrowers need to pay for an extra three years? The current Administration confirms that the COVID pause will be included in the repayment period, so no extra three years of payments are required.

To help borrowers, default management companies and the Federal Loan Servicers started contacting students months ago informing them of the restart of payments. I was told that extra staff will be brought on to help with the influx of questions that borrowers will have as the restart nears. Borrowers are being warned that it may take multiple attempts to speak with a representative at their service, so they should start early. Do not wait until October to start looking at repayment options. Borrowers are encouraged to log into the StudentAid.gov site or their Servicer’s website to utilize online tools as much as possible.

Guarding against fraud

There is a concern that borrowers will be defrauded by debt relief companies and criminals posing as servicers. I even received a letter from a fraud company offering to help me with the repayment of my loans. The letter had a seal in the corner that made it look like a legitimate Federal document. I was told that these frauds have steadily increased over the summer as we near the payment restart. Borrowers need to know who their Federal Servicers are and only discuss their information with people they can trust. I have been reaching out to my friends and family warning them of the scams.

Simplifying Loan Repayment

Finally, I wish the government would have used this opportunity to simplify loan repayment and follow other countries in the world like Australia that have an easy-to-understand income-based plan as the standard repayment plan. Since IBR seems to be the future, let us move in that direction and avoid the multiple repayment plans that just cause more confusion. I hope the early and ongoing efforts of the Federal Government, Federal Loan Servicers, Loan Default Management Companies, organizations such as NASFAA (National Association of Student Financial Aid Administrators), and colleges/universities make for a positive transition back to repayment for the millions of borrowers!

The Names Behind the Aid

Prepare for the Approaching FISAP Deadline

What YOU need to know about FAFSA Simplification: A Guide for Financial Aid Administrators and Leaders

Leading Through Uncertain Times: An Interview with Robert Heil

Getting Your Student Loan Discharged

Resumption of Student Loan Repayment

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